Cethal, RGB is usually what you use-do in photoshop and similar image editing programs. The images of a digital camera are RGB. The other option is CYMK, but that is for printing, and usually -unless you are a designer- you are not going to use that for nothing. So don't worry, just draw in the program you like.

great! it's tomorrow the hollidays for me, so i can do this contest (no homwork)
Can we draw a backgroung or it's axed "charachter design" only?
thanks! (sorry for my english,I'm french..I din't practise my english for 2years =( )

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